Strengthening maritime relations: Committee formed to negotiate with UAE govt

ISLAMABAD: The Cabinet Committee on Inter-Governmental Commercial Transactions (CCoIGCT) has constituted a committee to negotiate an agreement between the government of the UAE and the government of Pakistan to further strengthen the relations between the two countries in the maritime sector.

The meeting of the CCoIGCT presided over by Finance Minister Ishaq Dar constituted the committee on a summary moved by the Ministry of Maritime Affairs about the management of operations of the Pakistan International Container Terminal (PICT) on Monday.

The meeting was informed that Abu Dhabi Ports (ADP), owned by the government of the UAE, has shown interest in operating the container terminal.

The Ministry of Maritime Affairs has informed the meeting that the CCoIGCT during its meeting held on 12-6-2023 discussed the proposal that the Pakistan International Containers Terminal (PICT) may be taken over by KPT on the expiry of the contract on 17-6-2023. And KPT after taking over the charge, the terminal considered the requests of Multimodal Transport International, Premier Mercantile Services (Pvt) Limited and Pakistan International Containers Terminal companies to operate the containers’ terminal during the transition period from 18.6-2023.

The KPT is of the view that it is not possible for them to operate the terminal due to a lack of time and resources and interface with the clients and shipping lines.

The meeting was told that the KPT has informed that the timeframe for bidding has lapsed and the events have created an unforeseeable situation where the time limits laid down for open or other methods of procurement cannot be met.

They have; therefore, recommended that in the given circumstances only the PICT is in a position to provide management services to keep the terminal operational. Since the MCT offered its services without charging any extra management fee up to 30-6-2023 on reimbursement of reconciled expenses basis; therefore, the KPT sought approval from the federal government.

The meeting was informed that section 32 (3) of the KPT Act, 1886, as amended 2001 (Bombay Act VI or 1886) empowers the KPT Board to enter into lease concessions, management agreements or other arrangements with outside panics to provide for cargo handling, terminal operation and any other works or services in the port. Therefore, being an operational matter, the KPT was advised to take further necessary action.

The KPT has now taken over the charge of the terminal, w.e.f. 18.6.2023 and appointed the PICT as the ‘service agent of the KPT’, without charging of any fees, to continue the operation of the terminal till 30-6-2023.

Simultaneously, the KPT has forwarded a draft Framework Agreement for signing between the government of the UAE and the government of Pakistan with the aim of further strengthening relations between the two countries in the maritime sector.

The draft Framework Agreement submitted by the KIT was sent to the Ministry of Foreign Affairs and Law and Justice Division for views/ comments and legal vetting (Annex V). Both ministries have conveyed their consent for the signing of the FA (Annex-VI & VII).

The ministry proposed that: (i) a committee may be constituted to negotiate the draft Framework Agreement with the UAE, vetted by Law and Justice Division and the MOFA; (ii) a separate committee may be constituted to negotiate the commercial agreement between KPT and the UAE government; (iii) negotiation committee may be allowed to negotiate a draft operation, maintenance, investment and development agreement under G2G arrangements with a nominated agency of the UAE. The recommendations of the negotiation committees will be placed before the CCOIGCT for consideration.

The meeting was attended by Federal Minister for Maritime Affairs Syed Faisal Ali Subzwari, Federal Minister for Power Khuram Dastagir Khan, Federal Minister for Commerce Syed Naveed Qamar, SAPM on Revenue Tariq Pasha, Attorney General of Pakistan, Secretary Finance, Secretary Maritime Affairs, Secretary Law and Justice, and other senior officers.

Copyright Business Recorder, 2023